“Big Short” investor Steve Eisman disclosed Thursday he is shorting credit scoring company Fair Isaac (NYSE:FICO), accusing the firm of years of aggressive price hikes that have alienated mortgage lenders.
Speaking on CNBC’s “Squawk Box,” the former Neuberger Berman portfolio manager said FICO has raised prices roughly 500% over many years and “ticked off literally everybody in the lending world.”
The named short follows Eisman’s warning last week about the next credit crisis brewing inside private equity’s software loan book.
Why Fair Isaac Is In Trouble
Fair Isaac built the FICO score, the three-digit number used in roughly 90% of U.S. consumer lending decisions, and earns royalties every time a lender pulls one.
That near-monopoly is what gave the company its pricing power, and what VantageScore is now contesting.
Eisman argued the math has shifted against the credit-scoring incumbent. FICO has cut prices in …
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